Major changes to superannuation announced last night, more bad than good. The bottom line is, you need to start planning your retirement sooner rather than later. Speaking to a financial advisor has never been more important.

The Good

You can now put money into super up to the age of 74 without meeting a certain set of circumstances

There is now, no distinction between the self employed and employed when claiming a tax deduction for super contributions

The threshold for making a spouse contribution has been lifted from $10,800 pa to $37,000 pa, the maximum tax offset remains at $540.

The Bad

The amount you can “Salary Sacrifice” has been reduced to $25,000 pa down from $30,000 & $35,000 (depending on your age) this cap includes any employer sponsored contributions as well. This will affect those planning on making large contributions closer to retirement.

High income earners will pay 30% tax on super contributions on incomes over $250,000 pa rather than $300,000 pa previously.

Pension accounts are limited to $1.6M in size, the balance above this must remain in superannuation. Not likely to affect many, but for some will result in more tax being paid and more complexity in their affairs.

Death taxes have been essentially introduced with abolishing anti-detriment benefits. To minimise death on your estate some careful planning will have to be undertaken.

After tax contributions to super now have a lifetime limit of $500,000 rather than $180,000 pa. This is a significant reduction and will be back dated to 1 July 2007. This has big ramifications for those planning on maximising their Centrelink benefits, or contributing funds from the sale of businesses and/or investment properties to super.

Government employees who contribute to Super SA – Triple S accounts will have their essentially unlimited contributions to superannuation brought back inline to the rest of the Australia. Fair for everyone else but a huge reduction in the potential tax savings for government employees.

The earnings on a transition to retirement (TTR) accounts will no longer be tax free and will instead be tax at 15%, which will significantly reduce the benefits of the TTR strategy recommended to those age 55-64.

To learn more contact us on 08 8238 0100 to make an appointment with our financial advisor today.

To offer even better service to our clients we have added a personal risk division to be headed by Jonathan Buob.

Jonathan specializes in protecting businesses against the loss of key personnel and families against the loss or injury of a breadwinner. He can arrange cover to protect your income, manage estate equalisation issues and advise on any personal risk issues.

Jonathan’s experience will ensure that your risk management strategies are designed to include all aspects of risk management.

It News recently reported that The Australian Communications and Media Authority has launched an online portal for ISPs and network operators to log-in and check which IP addresses on their network might be infected with malware.

The new AISI (Australian Information Security Initiative) portal sources data on infected computers from 17 private sector organisations including Microsoft and The Shadow Server Foundation, which is then aggregated into a data set accessible by 139 internet service providers and educational institutions.

Over the last nine years, phishing alert data has been sent to ISPs and other network operators via emailed reports.

Evan Jackson, Guardians Managing Director said Cyber crime is becoming one of the biggest risks to business in Australia. Every week we are learning of new malware and hacking attacks. Many businesses don’t understand the cost of cleaning computers and restoring records he added. That’s why Cyber Insurance is so important.

Recently a US man was sentenced to 21 months in prison for his role in a cybercrime scheme that hacked accounts at banks, brokerage firms and government agencies.

According to prosecutors in the US he was a member of an international cybercrime ring based in the Ukraine.

“Unfortunately hacking, malware and cyber crime are on the increase,” according to Guardian’s managing director Evan Jackson. “Whilst criminals are sometimes being caught, the cost of recreating records, employing analysts and clearing systems is a significant drain on business. That’s why cyber insurance is so important.”

Guardian recommends that clients have a cyber security plan that includes regular backups, virus checks and simple actions like changing passwords and encrypting data.

Insurers can no longer rely on section 54 of the Insurance Contracts Act to reject a claim due to an insured’s act or omission if that act or omission did not cause the loss, thanks to a High Court ruling in the case of Maxwell v Highway Hauliers Ltd.

Guardian’s Managing Director Evan Jackson said, “This is good news for brokers and their clients as it means insurers are more restricted as to what they can exclude. It also means insurers will have to prove that an insured’s act or omission is the reason behind the claim rather than simply reject a claim due to a failure to disclose something or an unrelated action.”

In the case cited Maxwell v Highway Hauliers Ltd (Maxwell), the insurers sought to exclude the loss arising from two separate truck crashes because the two drivers failed to obtain a required PAQS test score (a psychological test about safety) so cover was excluded by way of an endorsement, although that failure was accepted as not being causative of the accidents.

The WA Court of Appeal held that s54 (insurer may not refuse to pay under certain circumstances) applied to the insured’s omission and so the insurers could not deny cover on that basis.

Recently the Australian Competition and Consumer Commission encouraged customers to check whether electric blankets that have been stored away for summer have been subject to product recalls.

Guardian’s managing director Evan Jackson said it is quite common to see a spike in recalls of winter products at the change in season. Often these include hot water bottles, heaters and electric blankets.

Jackson said consumers can check the Recalls Australia website to see if a product they own has been recalled.

He added that a good business risk management strategy includes insurance cover to protect against product recall if it is applicable.

Hockey said: “The inquiry should take into account the priority of effective mitigation to reduce the impact of disasters on communities”.

It will consider risk management measures available to asset-owners and options to achieve an effective and sustainable balance of natural disaster recovery and mitigation expenditure, according to the terms of reference released this week.

The insurance industry has welcomed the terms of reference and regards the announcement as a positive step forward.

Guardian’s managing director, Evan Jackson said that he is pleased that the Inquiry will be looking at how to achieve a better balance between investment in disaster mitigation and funds spent on disaster recovery. He said the general insurance industry is a strong advocate for strategies to lower the impact of extreme weather on vulnerable communities.

The transition period to register security interests expired on 31 January. Guardian’s Heather Blanco said that failure to register assets can result in “interests” becoming available to all unsecured creditors in the event of business liquidation.

Heather said “the legislation has been effected with little education or information provided to the business community.” “Some businesses have already been caught out”, she said.

It then leased the equipment to Maiden Civil, which used the equipment in civil construction work in the Northern Territory. Maiden made repayments to QES but in 2012, Maiden borrowed money from Fast Financial Solutions, granting Fast a security interest over all its assets and equipment. Four months later, Fast appointed receivers to Maiden, who claimed possession of the equipment Maiden was leasing from QES.

QES had never registered its interest in the equipment, and took its case to the High Court where the decision went against it.